V (A) Second Reading: Ordinance No. 95-21, amending General Employee Pension Fund Ordinance No. 91-08 AGENDA 9-5-95
' "CENTER OF GOOD LIVING -PRIDE OF WEST ORANGE" Item V A
Ocoee; I 7. DLL/1 I VAIN UtKUKIrI
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COMMISSIONERS
CITY OF OCOEE PAUL W oON
150 N. LAKESHORE DRIVESCOTT A.GLASS
�'� OCOEE,FLORIDA 34761-2258 JIM GLEASON
4'f v (407)656-2322Ci7Y MANAGER
E4 Of G00' ELLIS SHAPIRO
MEMORANDUM
TO: The Honorable Mayor and Board of City Commissioners
FROM: Ellis Shapiro, City Manager
DATE: July 25, 1995
RE: ORDINANCE AMENDMENTS - MUNICIPAL GENERAL EMPLOYEES
RETIREMENT TRUST FUND
On February 27, 1995, as a result of a subsequent meeting of the Municipal General
Employees Retirement Trust Fund, the board's lawyer, Mr. Christiansen, proposed several
changes to Ordinance #91-08.
The staff recommends the changes to Ordinance #91-08 that relate to changes necessary
to avoid any conflicts with State or Federal laws.
The staff cannot recommend any increase to benefit rate at this time. Ms. Beamer and
Psaledakis' memos clearly suggest the reasons for our recommendation.
Therefore, staff recommends the changes to Section 2. Does not recommend the proposed
change to Section 3, and recommends changes to Section 4, Section 6 and Section 25.
Respectfully Subm' ed,
ES4:fdg:6
di",
Attachments
ORDINANCE NO. 95-21
AN ORDINANCE OF THE CITY OF OCOEE RELATING TO
THE CITY OF OCOEE MUNICIPAL GENERAL EMPLOYEES'
RETIREMENT TRUST FUND; AMENDING THE
DEFINITIONS OF "CREDITED SERVICE" AND "SALARY";
INCREASING THE BENEFIT ACCRUAL RATE FOR EACH
YEAR OF CREDITED SERVICE; DELETING THE
COMMENCEMENT OF BENEFITS SECTION; ADDING
REVISED PROVISIONS FOR PURCHASE OF CREDITED
SERVICE FOR SEPARATIONS FROM EMPLOYMENT FOR
MILITARY SERVICE; REPEALING ALL ORDINANCES IN
CONFLICT; PROVIDING FOR SEVERABILITY OF
PROVISIONS AND PROVIDING AN EFFECTIVE DATE.
BE IT ENACTED BY THE CITY COMMISSION OF THE CITY OF OCOEE,
FLORIDA, AS FOLLOWS:
SECTION 1. Authority. The City Commission of the City of Ocoee has the authority
to adopt this Ordinance pursuant to Article VIII of the Constitution of the State of Florida and
Chapter 166, Florida Statutes.
SECTION 2. Section 1, Definitions, of the City of Ocoee Municipal General
Employees' Retirement Trust Fund as adopted in Ordinance No. 91-08, and as subsequently
amended, is hereby amended to amend the definitions of "Credited Service" and "Salary" to read
as follows:
Credited Service means the total number of years and fractional parts of years of service
as a General Employee omitting intervening years or fractional parts of years when such General
Employee may not be employed by the City. A General Employee may voluntarily leave his
contribution in the Fund for a period of five (5) years after leaving the employ of the City
pending the possibility of being rehired, and remaining employed for a period of not less than
three (3) years, without losing credit for the time of active participation as a General Employee.
If the General Employee does not remain employed for a period of three (3) years upon
reemployment within five (5) years, then the accumulated contribution will be returned.
The years of fractional parts of years that a General Employee serves in the military
service of the Armed Forces of the United States or the United States Merchant Marine,
voluntarily or involuntarily, upon being granted leave by the City and separation from
A-. The G.:neral Employee muat return to lis zrnployment as a General
Employee with the City within one (1) year from the date of hia
g -
B. The- General Employee depoaita into the Fund the same Sum that
to the date of depoait.
C. The maximum credit for military service Shall be five (5) years.
-- - - - - - -- -- - - - - - ---- - - -- - - - - - - - - - - - - -- - -
In the event that a Member of this System has also accumulated credited service in
another pension system maintained by the City, then such other credited service shall be used
in determining vesting as provided for in Section 8, and for determining eligibility for early
or normal retirement. Such other credited service will not be considered in determining
benefits under this System. Only his Credited Service and Salary under this System on or
after his date of membership in this System will be considered for benefit calculation. In
addition, any benefit calculation for a Member of this System who is or becomes eligible for
a benefit from this System after he has become a member of another pension system
maintained by the City, shall be based upon the Member's Average Final Compensation,
Credited Service and benefit accrual rate as of the date the Member ceases to be a General
Employee.
Salary means the total compensation reportable on the General Employee=s Member's
W-2 form plus all tax deferred or tax exempt items of income. Compensation in excess of
limitations set forth in Section 401 (a)(17) of the Code shall be disregarded. The limitation.
on compensation for an "eligible employee" shall not be less than the amount which was
allowed to be taken into account hereunder as in effect on July 1. 1993. "Eligible employee"
is an individual who was a Member before the first plan year beginning after December 31.
1995.
2
SECTION 3. Section 6, Benefit Amounts and Eligibility, of the City of Ocoee
Municipal General Employees' Retirement Trust Fund as adopted by the City Commission
of the City of Ocoee in Ordinance No. 91-08, is hereby amended by amending subsection
2, Normal Retirement Benefit, to read as follows:
2. Normal Retirement Benefit
A Member retiring hereunder on or after his normal retirement date shall
receive a monthly benefit which shall commence on his Retirement Date and be continued
thereafter during Member's lifetime, ceasing upon death, but with one hundred twenty (120)
monthly payments guaranteed in any event. The monthly retirement benefit shall equal two
and two-tenths percent (2 .2%) of average final compensation, for each year of credited
service.
SECTION 4. Section 15, Commencement of Benefits, of the City of Ocoee
Municipal General Employees' Retirement Trust Fund as adopted by the City Commission
of the City of Ocoee in Ordinance No. 91-08, is hereby deleted in its entirety.
Section 15. COMNMENCEMENT OF BENEFITS.
to the Trustees and specifying the form of retirement income and date on which the
--- - -- - . . - . . -- :e. .- - : : • .. ..
the following events occur:
A. The attainment by the Member of age 65;
.
participation in the Plan; or
C. The termination of the Member's service with the City.
2-7—If-the payment of a Member's retirement income cannot begin on the date required
of the Member's retirement income or cannot locate the Member after making reasonable
: - - -- - - - - ' -
days after the date on which the amount can be ascertained or the Member is located,
3
:" - -- - . . . - .
SECTION 5. The City of Ocoee Municipal General Employees Retirement Trust
Fund as adopted in Ordinance No. 91-08, is hereby amended to add Section 25, Separation
from Employment for Military Service, to read as follows:
SECTION 25. SEPARATION FROM EMPLOYMENT FOR MILITARY
SERVICE.
The years or parts of a year that a Member serves in the military service of the
Armed Forces of the United States, the United States Merchant Marine or the United States
Coast Guard, voluntarily or involuntarily, after separation from employment as a General
Employee with the City to perform training or service, shall be added to his years of
Credited Service for all purposes. including vesting, provided that:
A. The General Employee must return to his employment as a General Employee
within one (1) year from the earlier of the date of his military discharge or his
release from service.
B. The General Employee deposits into the Fund the same sum that the Member
would have contributed if he had remained a General Employee during his
absence. The General Employee must deposit all missed contributions within
a period equal to three (3) times the period of military service, but not more
than five (5) years or he will forfeit the right to receive Credited Service for
his military service pursuant to this Section.
C. The maximum credit for military service pursuant to this section shall be five
(5) Years.
D. In order to qualify for the purchase of Credited Service pursuant to this
Section. the General Employee must have been discharged or released from
service under honorable conditions. This section is intended to meet or exceed
the minimum requirements of the Uniformed Services Employment and
Reemployment Rights Act (USERRA), (P.L. 103-353). To the extent that this
4
section does not meet the minimum standards of USERRA. as it may be
amended from time to time, the minimum standards shall apply.
SECTION 6. Repeal of Ordinances. All ordinances or parts of ordinances in
conflict herewith are hereby repealed.
SECTION 7. Severability. In the event any section, subsection, paragraph,
sentence, clause, phrase or word of this ordinance shall be held invalid by a court of
competent jurisdiction, then such invalidity shall not effect the remaining portions hereof.
SECTION 8. Effective Date. This ordinance shall take effect on October 1, 1995.
PASSED AND ADOPTED this day of , 1995.
APPROVED:
ATTEST: CITY OF OCOEE, FLORIDA
Jean Grafton, City Clerk By. S. Scott Vandergrift, Mayor
(SEAL)
ADVERTISED , 1995
READ FIRST TIME , 1995
READ SECOND TIME AND ADOPTED
, 1995
FOR USE AND RELIANCE ONLY BY
THE CITY OF OCOEE, FLORIDA
APPROVED AS TO FORM AND LEGALITY
THIS day of , 1995.
CHRISTIANSEN & DEHNER, P.A.
Special Counsel
By:
APPROVED BY THE OCOEE CITY
COMMISSION AT A MEETING HELD
ON , 1995 UNDER
AGENDA ITEM NO.
5
ti 7-/Z- 9'.5-
"CENTER OF GOOD LIVING - PRIDE OF WEST ORANGE" �''
Ocoee ux • �uMnns,luxl:x
Ot \,� S. SCOTT VANDERGRIIT
pi!
• ` Ct�MMISSIONFRS
CITY OF OCOEE RUSTY JOHNSON
p PAUL W. FOSTER
150 N. LAKESHORE DRIVE SCOTT A.GLASS
44.4. ':;;;.. `.ZV
OCOEE.FLORIDA 34761-2253 JIM GLEASON
409
N.
(407)656-2322.
Of 0000 CITYN•�N.�crx
ELLIS SHAPIRO
MEMORANDUM
TO: Paul Rosenthal, City Attorney
FROM: Ellis Shapiro, City Manage
DATE: July 11, 1995
RE: City of Ocoee Municipal General Employees' Retirement
Trust Fund
Attached hereto are proposed ordinance changes, as suggested by the
City of Ocoee Municipal General Employees' Retirement Trust Fund.
The City administration does not intend to recommend that the
benefit accrual rate be raised from 2% to 2 .2%.
Please review the attached proposed ordinance amendment and advise
us as to whether it meets legality and form.
I would appreciate a quick review, as I would like this item to be
on the August 1, 1995 agenda.
ES/csa
Attachment
cc: Montye Beamer
Peggy Psaledakis
Jean Graf ton
LAW Omars
CHRISTIANSEN & DEHNER, P.A.
2975 BEE RIDGE ROAD
SCOTT R. CHRISTIANSEN SUITE C
H. LEE DEHNER TELEPHONE
SARASOTA. FLORIDA 34239 (813)922-0200
TELECOPIER
(813)923-5683
June 26, 1995
Ellis Shapiro, City Manager
City of Ocoee
150 North Lakeshore Drive
Ocoee, Florida 34761-2258
Re: City of Ocoee Municipal General Employees' Retirement Trust Fund
Dear Mr. Shapiro:
The Board of Trustees of the City of Ocoee General Employees' Pension Plan met
on June 26, 1995 to consider the comments received by Board Chairman, Mrs. Tanya
Miller, at her recent meeting with you regarding the proposed ordinance. Based on Mrs.
Miller's report to the Board of Trustees, the Board of Trustees has decided to change its
recommendation to the City Commission, with respect to the proposed increase in the normal
retirement benefit. Rather than proposing an increase from the current level of 2% to 2.5%,
the Board would like to recommend that the benefit accrual rate be raised from 2% to 2.2%.
I am enclosing an ordinance which is exactly the same as the previous ordinance which I
provided to you, with the exception of the following changes:
1. Section 3 of the ordinance has been amended to reflect an increase in the
benefit accrual rate to 2.2%.
2. Section 8 of the ordinance has been amended to provide for an effective date
on October 1, 1995.
By copy of this letter I am requesting that the Plan's Actuary, Foster & Foster, Inc.
provide you with a revised study indicating the impact associated with a change in the benefit
accrual rate from the current level of 2% to 2.2%.
The Board of Trustees' action to revise this proposed ordinance is an effort by the
Board to recognize the City's funding restraints. By reducing the proposed benefit increase
this year, the Board intends to review the funding situation at the end of the current fiscal
year and intends to recommend a similar increase to the benefit accrual rate next year.
Having responded to the City's concerns regarding the benefit improvement, and
having previously answered all questions with regard to the other provisions set forth in the
attached ordinance, I hope that we can now proceed with the review of this ordinance by the
Ellis Shapiro, City Manager
June 26, 1995
Page Two
City Commission. I would ask that our office be notified of the time and date when the City
Commission will consider the ordinance.
Thank you for your cooperation.
oYour fly,
Scott R. Christiansen
SRC/msb
cc: Jean Grafton w/enclosure
Ward Foster w/enclosure
FOSTER & FOSTER, INC.
e
6201 PRESIDENTIAL COURT, S.W., SUITE 203
TELEPHONE FORT MYERS, FLORIDA 33919
(941)433-5500 FACSIMILE
(941)481-0634
June 26, 1995
VIA FEDERAL EXPRESS
Jean Grafton, Secretary
General Employees Pension Board
City of Ocoee
150 N. Lakeshore Drive
Ocoee, FL 34761
Re: Municipal General Employees ' Retirement Trust Fund
Dear Jean:
In response to the direction of the Board at their meeting of
June 26, 1995, we have performed a special actuarial study to
determine the cost impact of increasing the benefit rate from
2 . 0% to 2.2%. The improvement would affect all current and
future employees and the benefit rate increase would apply to all
years of credited service. A comparison of the costs to fund the
current and proposed benefits for the City's fiscal year ended
September 30, 1996, is as follows:
Current Proposed
9/30/96 9/30/96
Required City Contribution $ 268 , 607 $ 309, 542
% of Projected Payroll 9 .9% 11.5%
If you have any questions regarding this analysis, please let me
know.
Sincerely,
John J. Garrett, Jr.
JJG/ksb
cc: Scott Christiansen
MEMORANDUM
DATE: July 24, 1995
TO: Ellis Shapiro, City Manager
FROM: Montye E. Beamer, Director_ p
Administrative Services
SUBJECT: Municipal General Employees' Retirement Trust Fund
After several discussions on required and/or requested changes to the Municipal General
Employees' Retirement Trust Fund with you and Peggy Psaledalds and with answers from the
Fund's legal counsel, I submit the following:
(1) All modifications to Ordinance 91-08 as subsequently amended which relate to
changes in Federal or State law or proven contradictions in Sections therein should
be executed immediately to be effective October 1, 1995.
(2) Modifications that redefine the benefit rate for Municipal General Employees from
2.0% to 2.2% and that allow health insurance coverage cannot be easily funded by
the City. In FY89-90 and FY 90-91 the City paid an average of$120,000 annually
for the previous retirement fund (all employees). In FY 91-92 the cost increased
to $403,218 (all employees), an increase of 236%.
The benefits in the packages for both Municipal and General and Police/Fire-
fighters were magnitudes better and more solvent or reliable. However, the City's
responsibility included not only paying its share for the plan but also paying any
underestimates in employee contributions from the previous year (i.e., pay-outs for
separated employees, losses in anticipated investments, amortization of initial
unfunded liability, drawdowns from early retirements).
To date there has been an increase each year in the City's contribution as a
statement of payroll percentage for Municipal General Employees in Fiscal Years
92 through 94 as shown in the FY 94 Comprehensive Annual Financial Report as
8.0%, 8.6% and 9.6% respectively. For Police and Fire-fighters those percentages
were 16.1%, 18.3% and 16.1% respectively.
Without additional accrual experience to assess the actuarial determinations on
present value of future retirement benefits I would not recommend any increase in
the City's contributions to the Municipal General Employees' Retirement Trust
Fund. This would also be true with the Police/Fire-fighters Retirement Trust Fund
which received $46,204 this year from the State; that dollar amount is significantly
different from the $81,000 originally estimated by the actuary in 1991.
Neither do I recommend the addition of medical benefits. With the City's present
health insurance expenses any additional expenditures must come from new sources
of revenue.
Should you have any additional questions, please contact me. I have attached Peggy
Psaledakis' memos concerning retiree medical benefits (June 30, 1995) and General Employee
Pension Plan - Increase the Multiplier (July 17, 1995) for your information.
Ocoee
I
or Goo PEGGY PSALEDAKIS, DIRECTOR 41m•• •=..1
PERSONNEL/EMPLOYEE RELATIONS
150 NI.LAKESHORE DRIVE•OCOEE,FLORIDA 34761
(407)656-2322•FAX(407)656-8504
MEMORANDUM
TO: MONTYE BEAMER, DIRECTOR ADMINISTRATIVE SERVICES
DA: JULY 17, 1995
SU: GENERAL EMPLOYEE PENSION PLAN - INCREASE THE MULTIPLIER
FR: PEGGY PSALEDAKIS, DIRECTOR PERSONNEL/EMPLOYEE RELATIONS A(
On June 30, 1995 per request of the General Employee Pension Board,
I submitted information to the City Manager with a copy to you
concerning Retiree Medical Benefits .
I have been advised that the General Employee Pension Board has
prepared an ordinance changing the multiplier from 2% to 2 . 2% .
Further, it is my understanding that they were originally
interested in increasing the multiplier from 2% to 2 . 5% . The
ordinance changing the multiplier from 2% to 2 . 2% will be presented
to the Commission.
I have always taken the position that the multiplier should be the
same as that of Police and Fire. I am aware that the City does in
fact receive some State funds towards the Police and Fire pension
fund. The school of thought has always been that the Police and
Fire pension program deserves a higher multiplier because of the
nature of the high risk factor with this line of work. This is
true however, I have always maintained the position that stress
factors involved in other job categories also have high risk
factors . Additionally, an individual working in sanitation is in
a high risk situation due to the nature of his/her job of having to
lift heavy weights on a continuous basis under varying conditions .
Having stated the above, I must also advise that our Elected
Officials in 1991-1992 did approve new and improved pension plans
for both the General Employees and Police and Fire. The
investments have not done well in the General Employee plan and the
City has had to increase its contributions to the plan.
Based on budgetary constraints, I do not believe that enhancements
to either plan should be considered at this time.
cc : Ellis Shapiro, City Manager
THE PRIDE OF WEST ORANGE
Ocoee
o\\\ .„�
Oretll =
o
Af,or coon`‘,` PEGGY PSALEDAKIS,DIRECTOR
PERSONNEL/EMPLOYEE RELATIONS
150 N.LAKESHORE DRIVE•OCOEE,FLORIDA 34761
(407)656-2322•FAX(407)656-8504
MEMORANDUM
TO: ELLIS SHAPIRO, CITY MANAGER
FR: PEGGY PSALEDAKIS, DIRECTOR PERSONNEL/EMPLOYEE RELATIONS 5►
DA: JUNE 30, 1995
SU: PENSION BOARD REQUEST FOR RETIREE MEDICAL BENEFITS
The General Employee Pension Board asked us to review the cost of
providing medical insurance for our retirees .
Presently the City provides Blue Cross & Blue Shield health
insurance for its employees at a cost of $162 . 22 per employee, per
month. The City provides dependant Blue Cross & Blue Shield health
insurance at a cost of $227 . 20 per family, per month in addition to
the $162 . 22 stated above. The cost for the dependent coverage
excluding the employee portion is $302 . 95 . The employee requesting
dependent coverage is responsible for $75 . 75 per month, which
leaves the City responsible for $227 . 20 for dependent coverage as
stated above .
Presently the City has six retired employees . At the current rate
stated above, if we were to provide health insurance for these
retirees the cost would be $162 .22 x 6 = $973 . 32 per month. If the
retired employee requesting dependent insurance the retired
employee would be responsible for the entire cost of the dependent
coverage of $302 . 95 .
As the retirees age, we would notice higher claims costs and this
would impact future annual rate adjustments . Once the retirees
reach 65 and qualify for Medicare, we could provide the attached
various supplemental insurance coverage to Medicare .
I have contacted Tanya Miller and advised her that my research, per
request of the Pension Board, is now complete and has been
forwarded to your attention.
cc : M. Beamer, Director Administrative Services
THE PRIDE OF WEST ORANGE
Blue Cross
O�Q Blue Shield
of Flonoa
P
CP
r.� a HEALTH OPTIONS.
TN
JJJ 'JJ.1 �•
June 29, 1995
Peggy Psaledakis
Director of Personnel
City of Ocoee
150 Lakeshore Drive
Ocoee, FL 34761
RE: Retirees
Dear Peggy:
Per our discussion on June 28, 1995 regarding coverage for retirees, please note that
coverage for future retirees can become part of your plan effective October 1, 1995. There
would be minimal rate impact at that time because the future retirees are currently covered
as active employees. Please note that coverage for retirees generally results in higher
claims costs, thus extending coverage past active employment could impact future annual
rate adjustments.
Peggy, please call me if you need additional information. I am looking forward to serving
you and the employees of The City of Ocoee again this upcoming year.
Regards,
Beverly
('.gagIrar�i 4.N., M.S.N.
t/
Account Executive
BG/jch
CENTRAL FLORIDA REGION
3191 Maguire Boulevard•Suite 100 500 South Florida Avenue•Suite 500
Orlando,FL 32803-3759 Lakeland,FL 33801-5268
Telephone 4071894-7200 Telephone 813/683-3327
1-800-545-6565
Independent Licensees of the Blue Cross and Blue Shield Association.
3 AEG:S EREO MARKS OF-I+E 3LUE CROSS AND 31UE 3NIELD ASSOCIATCN.AN ASSOCIATON OF,NOEPENOENT 31-LE CROSS ANO SLUE SHIELD PUNS
3'REGISTERED MARK OF 3LUE CROSS AND SLUE SHIELD OF FLORIDA.:NC.
10682-594R PS
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Facsimile Cover Sheet
To: Peggy Psaledakis
Company: City of Ocoee
Phone:
Fax: 656-5725
From: Jim Boyer, CLU, CFP
Company: Poe & Brown, Inc. of Orlando
Phone: (407) 660-8282
Fax: (407) 660-2012
Date: 06/23/95
Pages including this
cover page: 3
Re: Retirees Health Ins.
Comments: Here are the rates for a Medicare Supplement. By
state law, there are 10 mandated plans (shown on page 2). The
rates for these plans are listed on page 3. 1 expect to hear from
Beverly at BC/BS soon with info on the group rates. I'll send
over the info as soon as I receive it.
P111hfl141,I1
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Of coon PEGGY PSALEDAIQS, DIRECTOR
PERSONNEL/EMPLOYEE RELATIONS
I50 N.LAKESHORE DRIVE•OCOEE,FLORIDA 34761
(407)656-2322•FAX(407)656-8504
MEMORANDUM
TO: MONTYE BEAMER, DIRECTOR ADMINISTRATIVE SERVICES
DA: JULY 17, 1995
SU: GENERAL EMPLOYEE PENSION PLAN - INCREASE THE MULTIPLIER 4
FR: PEGGY PSALEDARIS, DIRECTOR PERSONNEL/EMPLOYEE RELATIONS
On June 30, 1995 per request of the General Employee Pension Board,
I submitted information to the City Manager with a copy to you
concerning Retiree Medical Benefits .
I have been advised that the General Employee Pension Board has
prepared an ordinance changing the multiplier from 2% to 2 . 2% .
Further, it is my understanding that they were originally
interested in increasing the multiplier from 2% to 2 . 5% . The
ordinance changing the multiplier from 2%- to 2 . 2% will be presented
to the Commission.
I have always taken the position that the multiplier should be the
same as that of Police and Fire. I am aware that the City does in
fact receive some State funds towards the Police and Fire pension
fund. The school of thought has always been that the Police and
Fire pension program deserves a higher multiplier because of the
nature of the high risk factor with this line of work. This is
true however, I have always maintained the position that stress
factors involved in other job categories also have high risk
factors . Additionally, an individual working in sanitation is in
a high risk situation due to the nature of his/her job of having to
lift heavy weights on a continuous basis under varying conditions .
Having stated the above, I must also advise that our Elected
Officials in 1991-1992 did approve new and improved pension plans
for both the General Employees and Police and Fire . The
investments have not done well in the General Employee plan and the
City has had to increase its contributions to the plan.
Based on budgetary constraints, I do not believe that enhancements
to either plan should be considered at this time .
cc : Ellis Shapiro, City Manager
THE PRIDE OF WEST ORANGE
Lor Omcz3
CHRISTIANSEN & DEHMER, P.A.
2975 BEE RIDGE ROAD
SCOTT R. CHRISZUNSEN
sum!C
H. LEE DEHNER SARASOU. FLORIDA 34239 TELEPHONE
(813)922-0200
TELECOPIER
(813)923-5683
February 27, 1995
Mr. F11is Shapiro, City Manager
City of Ocoee
150 North Lakeshore Drive
Ocoee, Florida 34761
Re: City of Ocoee Municipal General Employees' Retirement Trust Fund
Dear Mr. Shapiro:
As you know, our firm represents the City of Ocoee Municipal General Employees'
Retirement Trust Fund. The Board of Trustees would lace to recommend to the City
Commission the adoption of the enclosed ordinance amending the general employees' pension
plan. The proposed ordinance would amend the pension plan to accomplish the following:
g
1. Section 2 of the ordinance amends the definitions of Credited Service and
Salary. The definition of Credited Service has been amended to delete the
paragraph dealing with purchase of Credited Service for absences from
employment for military service. The adoption of the Uniformed Services
Employment and Reemployment Rights Act by the federal government has
dictated a change in the law dealing with the return of employees from military
service. Accordingly, we have deleted the provisions from the definition of
Credited Service and added a new Section 25, found in Section 4 of this
ordinance, setting forth the new federal requirements.
Section 2 also amends the definition of Salary to add additional language
imposing a cap on the amount of Mary which can be utilized in the
computation of pension benefits. This cap is provided for in the Internal
Revenue Code in Section 401(a)(17) as referenced in the new language. The
cap is initially set at $150,000 and is indexed for inflation and, therefore, it
will have little or no effect on our pension plan. The language is required to
be included in order to maintain our tax qualification.
2. Section 3 increases the benefit accrual rate from its current level of 2% for
each year of Credited Service to 2 1/2% per year for all years of Credited
Service. This change represents a benefit improvement to the plan and does
have an additional cost which will be discussed below.
3. Section 4 deletes the current section on Commencement of Benefits which was
initially inserted to maintain the tax qualification of the plan. This language
is no longer necessary and, therefore, we are deleting it.
4. Section 5 provides the new language dictated by the Uniformed Services
Employment and Reemployment Rights Act as discussed in paragraph 1 above.
Mr. F71is Shapiro, City Manager
February 27, 1995
Page 2
As I indicated, the proposal to increase the benefit accrual rate from 2% to 2 1/2%
will result in an increase cost to the City. The Board of Trustees requested that the Board's
actuary, Foster &Foster, Inc., conduct a study to determine the additional,cost. A copy of
that study is enclosed with this letter. The benefit improvement would increase the cost to
the City from its current level of 9.9% of payroll to 13.6% of payroll. As you know, the
most recent actuarial valuation from the police officers' and firefighters' plan provides that
the City will fund that plan at 16.9% of payroll. You are probably also aware that
municipalities who participate in the Florida Retirement System pay in excess of 17% of
payroll for their general employees. Based on these factors, the Board of Trustees felt that
it would be appropriate to recommend to the City that benefits for general employees be
improved and the funding level of the City be increased to pay the additional costs associated
with the benefit improvement.
If you or any member of your staff would Ike to discuss the proposed changes to the
pension plan as set forth in the enclosed ordinance, I would be happy to discuss them with
you. Once you have had an opportunity to study the ordinance and answer any questions
which you might have, we would request that this item be placed on an agenda for
consideration by the City Commission. I would ask that you notify my office of the date
when this matter will be considered by the City Commission so that we can be present to
answer any questions which might arise.
I thank you in advance for your cooperation in this matter.
Yo truly,
/
Scott R. Christiansen
SRC/jsc
enclosure
cc: Ward Foster (w/enclorure)
Jean Grafton (w/enclosure)
FOSTER & FOSTER. IN.. .
n.1a//iii!
6201 PRESIDENTIAL COURT. S.W.. SUITE 203/
T ELE?HONE FORT MYERS. FLORIDA 33919
(8131 433-55C0 FACStMrLE
February 14 , 1995 (813) 481-0634
Jean Grafton, Secretary
General Employees Pension Board
City of Ocoee
150 N. Lakeshore Drive
Ocoee, FL 34761
Re: Municipal General Employees ' Retirement Trust Fund
near Jean:
In response to the direction of the Board at their meeting of
February 13 , 1995, we have performed a special actuarial study to
determine the cost impact of increasing the benefit rate from
2.0% to 2.5%. The improvement would affect all current and
future employees and the benefit rate increase would apply to all
years of credited service. A comparison of the costs to fund the
current and proposed benefits for the City' s fiscal year ended
September 30, 1996, is as follows:
Current Proposed
9/30/96 9/30/96
Required City Contribution $ 268 , 607 $ 366, 542
% of Projected Payroll 9 . 9% 13 . 6%
If you have any questions regarding this analysis, please let me
know.
Sincerely,
Ward V. Foster, Jr.
WVF/ksb
cc: Scott Christiansen
•
'CENTER OF GOOD LIVING - PRIDE OF WEST ORANGE- '1AYOR • COMMISSIONER
Ocoee S. SCOTT vANDERCRlrr
o`
,,I .y COMMISSIONERS
r• O CITY OF OCOEE RUSTY JO3.
NSON
PAUL W. FOSTER
150 N. L:�KESHORE DRIVE SCOZr�‘.CUSS
`�'y `w OCOEE.FLORIDA 34761-2258JIM CLE.�SON
(407)(356-2322
Op 2.0° CITY MANAGER
ELLIS SHAPIRO
March 16, 1995
Scott R. Christiansen, Esquire
Christiansen a Definer, P.A.
2975 Bee Ridge Road, Suite C
Sarasota, FL 34239
RE: CITY OF OCOEE MUNICIPAL GENERAL EMPLOYEES' RETIREMENT
TRUST FUND
Dear Mr. Christiansen:
As a result of your February 27, 1995 letter to me regarding the City of Ocoee
Municipal General Employees' Retirement Trust Fund, myself, our Administrative Services
Director, Ms. Beamer, and our Employee Relations Director, Ms. Psaledakis, reviewed your
request. As a result of that review, we agreed that the amendments in Section 2 requested
by the Board of Trustees shown as topic 1. in your letter is agreed upon and can be
recommended to the City Commission. Likewise, Section 5 language is also agreeable and
can be recommended to the City Commission.
Section 3, which requests the benefit accrual rate from its current level of 2% to
2- 1/2% needs to be reviewed as at least a mid-year budgetary item or as part of an
employee benefit package during the next Fiscal Year. Upon review at mid-year, we can
advise you as to our ability to afford this request.
Finally, Section 4 that requests the deletion of Commencement of Benefits is
questioned by us for the following reasons:
( 1 ) If Section 4 is deleted in total, what other sections of the General Employees'
Retirement Trust Fund Ordinance outlines fully the process by which the
Commencement of Benefits occurs, and
(2) Please provide the City with any change in state statute or federal laws that
allows this maintenance of the tax qualification to be unnecessary.
Scott R. Christiansen, Esquire
Page Two
March 16, 1995
When these questions are answered, we will be ready to present our findings with
recommendations to your Board and the City Commission.
Sincerely,
////
1I'. apiro
• anagen
ES3:frig:71
cc: Richard Waldrop, Board Trustee
Jean Grafton, Board Trustee
Montye Beamer, Director of Administrative Services
Peggy Psaledakis, Employee Relations Director
LAW otricss
IISIrANSEN & DEHNER, P.A.
SCAT:R. C NS}N 2975 8E!RIDGE ROAD
SUIT!C
H. LER DEHNER ASFLORIDASARASOTA. 34239 TELEPHONE
(813)922-0222-o2
00
TELECOPm
(813)923-5683
March 28, 1995
Mr. Fllic Shapiro, City Manager
City of Ocoee
150 North Lakeshore Drive •
Ocoee, Florida 34761-2258
Re: City of Ocoee Municipal General Employees' Retirement Trust Fund
Dear Mr. Shapiro:
This letter is written in response to your letter of March 16, 1995 regarding the
proposed ordinance which I had previously provided to you with my letter of Feb 27
1995. I understand that you are prepared to recommend adoption of Sections 2 and of this
ordinance and you would like a further explanation for the deletion of the Commencement
of Benefits section of the pension plan as provided for in Section 4 of the ordinance. You
indicate that the proposed increase in the benefit accrual rate will be considered as a
budgetary item either during the mid-year budgetary review or the review for the next fiscal
year budget.
With regard to the deletion of the Commencement of Benefits section, I am enclosing
a copy of a recent list of Internal Revenue sections which was issued
Service. This list outlines the code provisions which are by Integral Revue_
and those which are not applicable to g a y tog plans
401(a)(14), Benefit Commencement, plans. f froo you can see, Section
are is on the list of provisions m which governmental
p1( exempt. Therefore,
while it is not illegal for this section to be in the general
employees' pension plan, it is not required and, therefore, we are recommending
that be
deleted. I have also enclosed a copy of Section 401(a)(14), as well as the sentence atthe�endd
of this code section providing that paragraph 14 only applies to those plans which are
meet required to the minimum vesting requirements under Section 411 out regard to
Section (e)(2) of Section 411. You can see that Section 411 also
sections from which governmental plans are exempt. I have appears on the list of code
Section 411(e) indicating that this code section does not apply to governmental eerned ymental plou with ans.opy of
You also ask which sections of the pension plan otherwise provide for the
commencement of benefits. Section 6, Benefit Amounts and Eligibility, subsections 2 and
4 provide for the commencement of normal and early retirement benefits. These sections
comply with the deleted Commencement of Benefits section. For terminated vested
members, Section 8, Vesting, provides that these terminated vested members will begin
receiving benefits on their otherwise normal or early retirement date. This section would
also meet the requirements set torch in the Commencement of Benefits section. For the
reasons set forth above, we would recommend the deletion of the Commencement of Benefits
section from the pension plan.
Mr. Ellis Shapiro, City Manager
March 28, 1995
Page 2
Please keep us informed about the consideration of the benefit improvement rovement in the
benefit accrual rate. We would Like to be present when this propos edimprovement is
discussed by the City Commission.
Thank you for your cooperation.
Yo ^ - may,
Scott R. Cluistiancen
SRC/jsc
enclosures
cc: Jean Grafton (wlenclosures)
Inte:.,al Revenue Code Provisions .kPPLIC.BBLE to Governmental Plans
Code Secrion Subiect
i2 Taxation of Certain Distributions. Rules with respect to taxation of
distributions, including taxation of in-service withdrawals, loans and
penalty ta-x for early withdrawals are generally applicable to
governmental ental plans. Special rules apply to distributions from
governmental plans which receive deducible employee contributions
and to withdrawals of employee contributions from certain suite plans.
01(a)(1) Formal Plan Required. A plan that allows contributions to a trust for
the sole purpose of distributing accumulated contributions and income
to employees and beneficiaries must be wriren.
010)(2) Exclusive Benefit to Emplovee;. All plan assets must be used
exclusively for the benefit of employees or their beneficiaries.
401(a)(3) Minimum Particit+_tion and Coverage Requirements. Pre-ERISA
minimum :.:.rdcipation standards and coverage. tests must be met.
O1(a)(4) Nondiscrimination Rules. Contributions, benefits, optional forms of
benefit and other plan features must not discriminate in favor of highly
compensated ernt:Icyees.
01(a)(5) Special \ondisc=nination Rules. Provides exceptions to
nondiscrir, -nation rules for uniform percentage. of pay benefits, plans
limited to salaried or clerical workers, integrated benefits that meet
401(1) and plan benefits offset by employer-provided Social Security
benefits. Also contains plan aggregation rules for satisfying 401(a)(4).
01(a)(6) Ouarerlv Par�icioa on Test. Pre-ERISA minimum participation and
coverage standards must be met at Ieast one day in each quarter of a
' "beconsidered qualified for the a^;.�
plan s taxable. year to be c�r._i��... ,...�.,, taxable
year.
401(a)(7) Vesung Re_uire- Pre-ERISA rdn -nurt vesting standards,
re guir:n, :l,'U o ves:,..ng upon plan te.r iris:cn or discontinuance of
employer contributions, be met.
401 Forfeitures. Forfeitures may not be used to increase plan benefits in
a defined benefit plan.
401(a)(9) Recuired Distriburions. Governmental plans must make distributions
to art employee no later than April 1 of the calendar year in which he
or she attains age 70 1/2 or in which he or she retires, if Iater.
401(a)(16) Maximum Benefits. Benefits or contributions may not exceed 415
limits.
- 1 -
=0I(3)(17) Maximum Ccmoensstion. .-kr.„ual compensation under a pIart must be
limited co S150,000.00, (as indexed).
401(a)(24) Pardcioation in Group Trusts. A group trust can remain tax-exempt
while accepting funds from a governmental plan or government
maintained 457 plan cr accepting funds intended to satisfy
government j obliEatiors with respect to such plans.
401(a)(25) Stated .Actuarial Assumpdons. A defined benefit plan must specify
acotaria i assumptions in a manner that precludes employer discretion
in order to provide definitely determinable benefits.
401(a)(26) Additional Partics_don R;cuirements. Each plan must cover the Iesser
of 60 employees cr 40 of all employees. Not applicable to
government plans with respect to employees who were parac•pants in
the plan prior to July 14, 1:-3S3, for plan years beginning before January
1, 1993. Special exemption far plans maintained for cert-;n public
safety employees.
401(a)(31) Eligible Rollover Distribution. This section requires a plan to permit
distributees to elect to have an eligible rollover distribution paid
directly to an eligible retirement plan specified by the disaibutee in a
direct rollover. This requirement applies to distributions made after
December 31, 1992.
=01(b) Re -oac;ive Changes in Plan. Remedial plan amendments may be
adopted up to the employer's tax filing due date. including extensions,
or Iater as _rescribedby the Secretary. Since gove.rnmentl plans are
exempt :ram ruing returns, LRS Notice 89-8, i939-3 provides that the
due date for such plans is deemed to be the Iast day of the seventh
month following the end of the plan year.
401(0 Custodial Accounts and A nnuiry Contracts. Either may be used in lieu
ora trust if the 401 requirements are otherwise satisfied.
401(`) Nontransferable Annuities. Cont acts or certificates issued after
December 31, 19c1 -gust :e nontransferable if the owner is other than
_
theplan �: :......
401(h) Retiree Nfe_ical Penefits. Pension or annuity plan may provide
sickness, ___ident, hospitalization and medial benefits for :et—ees, their
spouses and their dependen s.
401(k) Cash or Deferred rrancements. Governmental organizations generally
cannot maintain a qualified cash or deferred arrangement. However,
the Code contains an exemption for arrangements adopted by
governmental units before May 6, 1986.
401(1) Integration with Social Security. Integrated defined benefit and defined
contlibuticn pians must comply with specific rules in order to maintain
qualified status. These rules are also contained in 401(a)(5).
401(m) Matching and Emolovete Contributions. Special nondiscrimination test
is applicable to employer matching and certain employee contibudons
under qualified plans.
402 Taxability of Distr;c+,:ion from Plans. Total and partial distribution and
rollover rules.
403 Tax-Sheltered .Annuity Coneacts. Rules for determining tax-sheltered
annuity exclusion allowance., nondiscrirninadon tests, etc.
413 Collectively Bargained Plank. Discusses application of qualification
requirements to coi'ective!v bargained and multiple-employer plans.
414 Definitions and Sozci_I Rules.
Key definitions of;overnne:tr l plans,
QDROs, a:iliated service :roup, leased employees and separate line of
business.
414(h) Government "Pick s". Allows a governmental entity to treat certain
employee contributions as employer contributions.
414(q) Uniform Definition ef'-?i!h!v Compensated Employees. Applicable for
purposes of nondiscrimination testing of 401(a), 401(k) and certain
403(b) plans.
4!5 Limitations on CO- utiens and Benefits. Dollar and percentage of
pay limits are specified. Special rules regarding benefit reductions
apply to piaris maintained for certain police and firemen plans.
Government plans are subject to pre-TRA 86 rules regarding early and
Iate benefit commencement limits. Special maximum benefit election
also available to gc.,vemmental plans.
503(b) Prohibited Transactions. Derails investment and loan rules.
3405 Withholding from Pension Distributions. Trusts must require
employees to mak: an election regarding withholding for all
distributions.
a_x on "2: to \._: -;mum Distributions. Payee is responsible
for any excise tax re_ultin_ from underpayment or benefits.
4981A Tax cn =xC.t.SS '=-�otic^.S. Recipient oI excess distributions is
responsible for payment of tax.
6652(i) Penalty for Failure to Give Rollover Notice. Plan administrator must
provide a written expIaraton to each employee who receives a
distribution eligible for rollover teatment.
Internal Revenue Code Provision F-ern Which Governmentrl Plans are EXDCFT
Code Section ubiect
01(a)(10) & 416 Top-T-Teavv Provisions.
401(a)(11) & 417 Joint and Survivor .Annuities. Requires qualified joint and survivor
annuity benefits payable at retirement. Pre-re rement survivor annuity
benefits must become payable upon death prior to retirement.
401(a)(12) & 414(1) Plan Nferser. Accrued benefits must be preserved in instances of plan
merger, consolidation or snsfer of assets.
401(a)(13) Anti-alienation. Prohibits `z assignment or alienation of benefits.
401(a)(14) Benefit Commencement. Benefit payments must commence no later
than 60 days after the close of the plan year in which the later of
normal retirement (or age 65, if earlier), 10th anniversary of
participation or tern nation occurs.
401(a)(1S) No Retirement Benefit Reductions. Retiree or beneficiary terminated
vested benefits may not decrease due to increases in Social Security
benefits alter retirement.
401(a)(19) Withdrawal of Emzlovee Contributions. Accrued benefits derived from
employer cone buttons may not be forfeited as a result of withdrawal
of employee contribution when an employee is at least 50% vested.
401(a)(20) Qualified Total Distributions. Qualified total distributions may be
made from a terminating plan with appropriate notice to PSCC.
410 Minimum Pardcication Standards. Governmental plans must meet pre-
ERISA requirements of 401(a)(3).
411 Minimum Vestine. Pre-ERISA requirements of 401(a)(4), which
stipulate that a plan may net discriminate in favor of officers,
shareholders, supervisors Cr :-:_;.ly compensated, and =01(a;'(7), which
requires 100 a vesrng upon plan ter inadcn cr discontinuance of
employer contributions, must be met.
=1 Minimum =undir.a Standards. Plan must pre-ERISA requirements
^c , meet �
of 401(a)(7) which requires 100 o vesting upon plan termination or
discontnuance of employer contributions.
414(p) Qualified Domestic Relations Orders (ODROsl. Although the
general
QDRO rues do not apply to governmental and non-electing church
plans, distributions from these plans may be treated, for tax purposes,
as made pursuant to a QDRO.
4972 Excise Tax on Non-Deductible Contributions. Requires a 10% tax on
non-deductible ccnt butiens to the plan.
4975 Excise Tax on Prohibited Transactions. A tax on each prohibited
transaction must be paid by the disqualified person who participates in
the prohibited transaction.
4980 Excise Tax on Reversion of Pian Asset.,. Imposes a tax of 15% of the
amount of any employer reversion from a qualified plan.
6057 Annual Resistration Statement. Schedule SSA, reporting separated
participants with deferred benefits, is not required.
6053 Annual 'Return. Govemmental plans are not required to file annual
reporting Form Series 5500.
6059 Actuarial Re ort (relates to $4121. Schedule B of Form 5500 series is
not required for plans not subject to minimum funding standards.
5 -
income r ax—,✓ens;on Plans, Etc.
F.:OZa s .
(E) EXCEPT!' HIM N 11-INS I4•"_V•KIIWEIr IN'F.(Ttnv 4044.• I,angrapn shall no, .,1,/,1%.tip :+`.
a plan which the Secretary has delermuo•,i I. .1 Man desrnlxdl in xenon }(Ittr) for .t
r
,mil 10031lun Ihercui)CO whmh participation is luimaiitially limited to individuals who. Intfore
January I. 1976.ceased employment covered by the plan.
•
tF)C.ttss REibHENt'}'_—i•ur—
ti) provisions under‘rntch participants may elect to waive the requirements ui this
•
paragraph,and
r
(,i)other definitions and special rules for purposes of this paragraph.fee section 417. •s';.:1
(12)A trust shall not constitute a qualified trust under this section unless the plan of which such "
trust is a part pnnitles that in the case of any merger or consolidation wish.or transfer of assets or
liabilities to.any tither plan a iter September 2. 1973.each loam iei 'ant in the plan would(if the plea[ - ,i'
then terminated)receive a benefit immediately alter the merger.consolidatun,or transfer which is
equal to or greater than the benefit he would have been entitled to reectre immediately before the
merger,consolidation,or transfer ill the plan had then terminated).The preceeding sentence does not •3'''.
apply to any muitlemplover plan with respect to any transaction to the extent that participants
either before or after the transaction are covered under a muitiempluver plan to which title IV of the
Employee Retirement Income Security Act of 1974 applies.
(13)AasIt:xas ,vr von.tu>rsr,►nuN.—
(A)IN GF1EA.1L—,\truss shall nut constitute a qualified trust under this section unless the `"
plan of which such trust is a part provides that benefits provided under the plan may nut he
•
assigned or alienated. Fur purposes of the preceding sentence, there shall nut be taken into
account any voluntary and revocable assignment of nut to caceed 10 percent of any benefit
•
payment made by any lrrtiripant who is rrrt•iving hrnefits under the plan unless the
assignment mr alienation is made for purpm es of defraying plan administration runs.. For
purposes of this paragraph a loan made to a participant or beneficiary shall not be treated as an •
i assignment or alienation if such loan is secured by the participant's accrued nonforfcitable
1 benefit and is exempt from the tax imposed by scrtion 4975 (relating to tax on pmhihited
transactions)by reason of section 4975sd)s i).This paragraph shall take effect on January 1,
! 1976 and shall nut apply to assignments which were irrevocable on September 2. 1974.
till SPEt't.V.1ttius Fn*IiittENTIr REt..1T1u,Vsntet,t{(c—Subparagraph(A)shall apply to the .,
creation, assignment, or re'uenition of a richt to any benefit payable with respect to a `"
participant pursuant to a domesatic relations order,except that subparagraph tA)shall not apply T
if the arde is determined to be qualified domestic:dations ardor. r`T.
t 14)A tr ust shall not constitute a qualif led trust under this section unless the pian of which such 7`"
trust is a part provides that, unicss tic participant othereise elects.the payment of benefits under
the;than to the participant will begin put later than the Goth day after the latest of the close of the
plan year in,yhich—
tA)the date un which the p articipant attains the earlier of age 63 or the aerial retirement
age specified under the plan. -
rnt
• i.
the year in which the participant commenced
(B) ocaus the 10th anniversar} of;tacticipatiaa in the plan,or
IC the participant terminates his service with the employer. .._::":"-
1 In the case of a plan which provides for the payment of an early retirement benefit.a trust forming a
part if such plan shall not constitute a qualified trust under this section unless a participant who
.i satisfied the serine requirements (fir'uch early retirement benefit. but .cparattdi (ruin the service
f •
(with any norfurleitable right to an accrued benefit)before :atifyinc the age requirement for such a=
_
carry retirement benefit.is entitled upon satistac::un of suc:7 age requirement to receive a benefit put -_`-
fess than the benefit to which he would Sc entitled at the normal retirement age.actuarially reduced
:no
under regulations prescribed by the Sec
etary.
r) 3 t15) A trust shall not constitute a qualified trust ander this section unless under the plan of
•�
watch such trust is a part— }>
:,apt tA)in the case of a participant or beneficiary who is receiving benefits under such plan,or
my (Q)in the ease of a participant who is separated from the service and who has nonforfeitahle
::32 right to benefits,
par
`� ,.z.
Lae such benefits arc nut decreased by reason of any increase in the benefit levels payable under title II of
the Social Security Act or any increase in the wage base under such title II.if such increase takes
4,---:i.
the
. • Internal Revenue Code Sec. 401(a) =4=
•
1?L
i 5033-2 1986 Code—Subtitle A, Ch. ID, Part lA
subsection unless the plan provides that the amount of such deferrals under such plan and all other discuntlnwncr
t plans,contracts,or arrangements of an employer maintaining such plan may nut exceed the amount ;tattling.Al ter.
of the limitation in effect under section»lL'!g,)(I 1)fur taxable years beginning in such calendar year. P.L 102-315.
r.
' (C.rution:Code Sec.401(aX31).below,as amended by P.L. 101-313 applies to Act kc.._
read as ab•
P;• distributions after December 31.1992—CCH +tltl a w�>,If 41
te•1 0111111,1‘
(31)OlT10NAL DIRECT TX 11>TER OF EL1C1I1L 8 Rnt_L0VER DlsTR1nt r10N5--• I buffos rrywrn
icemen'in.kt.
tA)IN(:F_\Ex.;L—.•1 trust shall nut constitute a qualified trust under this section unless the
ti� plan ui which such trust is a part pruaides that ii the Jistrihutee of any eligible rollover (()a at111,c..
distribution— undar
er etitrn
,: (111 sura
tu
•
l i)elects to have surh tlimrihution(laid directly to an eligible retirement plan,and tnhutiwt.
till specifies the eligible retirement Ilan w which such distribution is to he (raid tin P.L 102•3ts,
Nuttform and at such time a>the plan administrator may ltrescrihrl, 1ct 4e.9=-
' such distribution shall he made in the form of a direct trustee-to-trustee transfer to the eligible of tThe+ragras above
4
retirement plan so specified. December 11.
(13)LtatrrArioN.—Subparagraph(,a)shall apply only to the extent :hat the eligible rollover P.L.101.219.
distribution would he includible in gross income it not transferred as provided in subparagraph Act Sec.7:1:
.r (Ai(determint,l without regard to sections 402(c)and-103(a)(-111. paragraph Lit
`t IC) &1t;tuu.r.xultt1vn)t tltmttlltTim,—t?or purposes of this paragraph, the term "eligible wa above
roiluver distribution"has the meaning , The onove
given such term by section�O_1tU-1(,;), provision oi
(U) L•l,tr:IJu.E it E11tf.3tF_\T PLAS.—rut purposes of this paragraph, the term "eligible Act of 198e(!
F retirement plan" has :he meaning given such term by section 4U2tc1(31(li), except that a P.L 101-239.
qualified trust shall he considered an eligible retirement plan only if it is a defined contribution Art Sec.
plan,the terms of which permit the acceptance of rollover distributions. • meatst=`'rC
c menta adu(nr.
Paragraphs(11),(121,d 131,d l;l,(l?1,(191,and t2Q1 shall apply only in the case of a plan to which section plan ame elm.
• 411(relating to minimum vesting stantiartisi applies without regard to subsection(e)(2)of such section-
P.L 101-239.
t Amendments i iiil in the caac ui a titan maintaine,l pursuant to uil.,atre An See..'t
?.L 103-obs;132I2(a)(ixA).(c teiriraiutng under the Railway Lakin?At,,the date at meets. by inserting
ui trtgtr.IX:2.:(aMIM M(',amens.,i(-•.kVr :+tl,a•1:1 tion i 'n nrenawn r rsplarernent ui the test porn
apyl}'after"
hr .4 rt . 'L^•. r m per tiro trtr.w r ami utvrniq "Nlartive hartamine agreements m effect .re such date•w The above
ut
•
-11.F11.1,tr by arming the..,..wl-ruts-me.amt by a..kne yria.anent,.x the provtaiw
iB1 January I.lt1JT. 100-202)to sr
>r at :he end:..nevi new whnangrap,.III to and„. .re•
- t:: Y•tur lar .mrrumcnt, the Mwnl •ynicnte w (......:r :VV. 3t T<t�•m..,/WSJ:}F.,1stark.Ch Ua.tL I Lt�a,_ r
?.L 1O1•t40.
.31113$!;•rra,l a,i.dlons {,t',.i\i it iL—;n the rase vi.n riigdde participant:n
Act st
^te.`.,rMarC'43t1-"tin"' the: I"•'''""•Oit at :;;, `'sole internal
l4 1"-04tI. th•I h.ita !unit.1 list
• tar lntcrnal Haaenue C',.k.H I'•wa, the sellar !imiuuoe by atnitng
ume and in the acme manner as uralcr,.i t tm•1t ' ' plan',arm!.,
un.ler satttstn:t)Ita It!i 1 w such(..'.le aSa!l nut apply to tar abuar.
P.L.:03.66,;112124)(2): cctcnt the,mint ui sum
p)ertsattun rented is allwef!;o he
Act '.r, 1!!ita■'1 amrna.,i ('•.,r �.,• :rat...41 1'. 6s• taken into acnwnt under the plan'svukl he retdueeel beiuw
The
oabove
inking"t 1:•A:rust'and in-ennuitar aunwnt orth supe alk.wa,l w Lr taken mW-Iceman-Icemansection 1131
w
r ! 17.G•s::riasaut.�linos— an.i.•r Ifir;•i.,na.Ineifr.'t..t dors•I,1!■l.l• 99.514),
• -4..‘i(V t:F.Nfkal.�1 trust 'Ili FLli..hL}t•aanciren-r.--l',x purposes ui subparagraph P.L 100.647.
,A I.an cin(tt.le;art iri(,ant is an tmlial.ival who firm terpene Act Ser. I
•+• The above amendments generally apply to benefits a participant in the plan duns/a plan year beginning Imitate adding a the
accruing in plan years beginning alter December 31, the rat pian year t*' nine after the earlier ul--. above.
993.However,:or special rules see Act Sec,13212(dx2). .i.the plan year in rvnich the plan is amended to reflect The above
f (1)below,
a
T the mcndmenta made by this wetiun,or See.1011(eX.
P.L.:03-66.1 13213(02)-(3): it,,lhremher 31.I995, 1Q11i1 C:ur
Act Set t3222(dx2}{])provides C'1 l'La\'11 1 hE.W►\liflr lar LN'uMIVILa')LJStR1.—iltia made by this
t2ace.1lr I1 d)( nun.u�►.0 i,_l�•—InIwraera(.h shall nut apply lar any rlitil.k participant ui a atter Decrial.
• ihr.-ase'.1 a pian !,fan unless the clan isamende.l...Mai the plan iraorpwaee,
.'ltaintainal pursuant to 1 •e :d.' ,..k,live lurgaiuutg mien-rase the similar ian
uilarIir nsiudderserttwt4Uhaalit.. the Reftill In the,
•:-4
agreement,between rmp(uyrr ertxesental far,and l w m.xr s ap:
empluser.rali14+1 trfwe frac.dare ui ;he enactment ,d thio frac Internal Kca,nue(•,....k.ui 1.A.,44 eifnuve with„mom,to shall nal'app
n
Act.the amrmlmema made by this,croon,hail nut.ppla•to twaeiirpriile;articipanta for plan years beginning after I), matt .sea
cuntrihuutna w aeneiita pursuant .. such agne.T•e.'.C. 6x ''Croner 31, 19'15 iw earlier :i tae plan amendment w before the
.
herat
elan yeas:,egimmn �rucideai.
¢ seiwr:..^.r earl:cr art— ill the!ate
,A.the:ate"(,11-... P.r. 102•313.1 32:(bl(SXA}{9): :est of such
u January!,:crus AtI Sat 9:111..541 AMisi amrn.ted('ate.Ser. 401ia.20. regard tuails
he striking '.yuaiiiie•I total slim rtnutun de,rnhe d in.a,tn.n t 111 Januar
- • nw
itthe,.ateunnichthe:a..ui•u.it..wt.,u,•r',.reautuit a:s,as5•f:suII' and marrttnt -I lir :Marc diarritwtnuts
• agreements terminates w
'",itat rrcanl ear any ,-rtes.«was A111111'1I basalarn year to a .hstrdwree aaeeint ui a P.L t0064;
a' amrn.tmrnt,•x rn••iifi.'au....w .w n.rr.emr,n.•.t•.e purr .rfminaln.n.w toe•plan.w
i' who's the:rust i,a!art,lir in the Art Sic. l
such,air ui trueImem I,.x .ear Lai a pruiit•.lanrig ,x stw 1 :mous 111.40. a .umpirte ad.hnc at the
,• Sec. 4O1(a) Internal t
.V
•
income Tax-Deferred Payment 5153 `
:i r
xX 1
tmwr..41rrt.t•r lurttmmt +errrmrnr..•meml mtu htrwe
=•:ai Act Sec. 1898(aXIXA)amemhsl C.slr.Ste 11 It,1.r4.I.. Janis
-sty 'M '
.sty I. i. . hwh are- i(;
:cad as ali.w•e.(nut to amendment.Coot See.41114 k41 trail I;U het arra ret,iris
as follows: 1 re rrp.rr•rntautra and I r mute J
employers.and )
t41CLtcsV tsn_ars-Thetequirementsof tuhseet tun sal cal sucresaw agreements to I or more entlaetlte harcrn• � ..
'hail he deemed woe sansiied in the case td a class year plan int agreements which terminate alter July J0. 1984. and .:
' townies n d such plan prides that I(Z)lament of each employee's !white January I.1985, s
It rcht to it lentil from the cnntphut ions of the emvloyer to
0n Sas Irhalf with resthe amendments mark by•cretin.101 'hail mu slaty to 3
pert to any plan year are meitrrfenahie pian amendments aelopinl!whim.Innd I.1985.in nu ant In .
::an ort later than the eml.i(the 5th plan year frsiln.nnt the plan s
•❑e year fur which such cnntnl,uuuns were made.For use uwrs.4 soh serrrsvw averments I)(s ennhue1 recant In any muddles. a
I ► 1 en.w mrp.ensnt after kYemlier.31.1'JW I.
;
'CENTER OF GOOD LIVING - PRIDE OFWEST ORANGE.' MAYOR• COMMLSSIONER
Ocoee S.SCOTT VANDERCRIFT
' COMMISSIONERS
P •• CITY OF OCOEE RUSTY JOHNSON
D. PAUL W. FOSTER
D 150 N. LAKESHORE DRIVE SCOTT A.CLASS
V.ry (4-3.. v
OCOEE.FLORIDA 34761-=3 11r(CLEASON
lE4 G f G 000 ,,,:t (407)656-2322 C1TY M ANAC'dR
ELLIS SHAPIRO
April 19, 1995
Scott R. Christiansen, Esquire
Christiansen 8z Dehner, P.A.
2975 Bee Ridge Road, Suite C
Sarasota, FL 34239
Dear Mr. Christiansen:
We appreciated your response dated March 28, 1995 regarding the City of Ocoee
Municipal General Employees' Retirement Trust Find. We continue, however, to have a
problem with paragraph three of your letter regarding the question as to what constitutes,
"otherwise normal or early retirement date" and secondly, what is the City's cap on payment
to individuals if they retire at 50, 55, 60, with 5, 10, 15 years?
Upon an answer of these questions, I think we can proceed.
Sincerely,
iii _,,
Shapiro
ity Manager
ES3:fdg:96
cc: Montye Beamer, Administrative Services Director
Peggy Psaledakis, Personnel Director
LAW OmQ1
CHRISTIANSEN & DEHNER, P.A.
2975 BEE RIDGE ROAD
SCOTT R. CHRISTIANSEN SUITE C
H. LEE DEHNER TELEPHONE
SARAsoTA. FLORIDA 34239 (813)922-0200
TELECOPIER
(813)923-5683
April 25, 1995
Fllis Shapiro, City Manager
City of Ocoee
150 North Lakeshore Drive
Ocoee, Florida 34761-2258
Re: City of Ocoee Municipal General Employees' Retirement Trust Fund
Dear Mr. Shapiro:
This letter is written in response to your letter of April 19, 1995 regarding additional
questions resulting from the proposed amendment to the General Employees Pension Plan,
as set forth in the proposed ordinance which I provided to you with my letter of March 28,
1995.
Your first.question deals with the definition of the term "otherwise normal or early
retirement date". The otherwise normal or early retirement date is simply the date on which
a terminated member would have reached normal or early retirement, had he continued to
work. Normal retirement in the General Employees' Plan is age 60 and early retirement is
age 50 and the completion of five years of service. Therefore, the otherwise normal
retirement date for a terminated member would be the date on which he attains age 60 and
the otherwise early retirement date would be the date on which the person attains at least age
50 and the date on which he would have completed at least five years of service.
In order to be vested under the pension plan and, therefore, have a right to a pension
benefit, a member must have a least five years of service with the City. If such a member
terminates his employment for any reason prior to five years of service, his only right is to
the return of his own contributions to the pension plan. If a member terminates employment
after he has five years of service, he has a right to a pension benefit beginning at his
otherwise normal or early retirement date. If the terminated member elects to wait until his
otherwise normal retirement date, he will receive a benefit based upon the number of years
of service that he had on the date that he terminated employment multiplied by 2% (proposed
to be increased to 2 1/2%) of his average final compensation on the date of his termination.
This benefit would begin when the terminated member reached age 60.
This same terminated member may elect to receive a benefit at his otherwise early
retirement date which would be the date on which he would have reached agge50 and
completed at least five years of service with the City had he continued to work. His benefit
would be calculated in the same manner as for normal retirement, except that the benefit
amount would be reduced actuarially from his otherwise normal retirement date to take into
consideration the fact that he begins to receive benefits earlier.
Mr. EI1is Shapiro, City Manager
April 25, 1995
Page Two
Your question arises as a result of our recommendation to delete the
Commencement of Benefits section from the pension plan. As I indicated in my previous
letter, this section has been determined to be inapplicable to government pension plans. In
any event, the benefit provisions in the plan would meet the
Commencement of Benefits section an requirements a the
provides that benefits from the plan must commence oCommencement t Benefits n hi section
member would reach age 65 or the date of his termination of service with the Ci
ty. This
requirement is met by virtue of the fact that normal retirement benefits arele age
60 or at a later date if the member continues to work. Paye at age
Once a member retires from the pension plan or once a terminated vested employee
begins to receive the benefits which I have described above, benefits are • yable to that
individual for his or her life, but with 120 payments guaranteed. Should Is.
recipient die
before the end of ten years, his or her beneficiary would receive the
remainder payments for the ten year period. There is no other on nts of the
tional
form of benefit may be selected by a member, but theioptional form of benefit would be
actuarially equivalent to the benefits which I have described above.
Hopefully, this letter has adequately responded to your letter of April 19th. Please
be assured that the deletion of the Commencement of Benefits section is completely
appropriate. We are recommending the deletion of this section from the plan document for
all of the plans which we represent. The information which I provided to you with my letter
of March 28th clearly supports this recommendation.
I hope that we can now proceed with the review of this ordinance by the City
Commission. Thank you for your cooperation.
Yo >6),
. �
Scott R. Christiansen
SRC/msb
cc: Jean Grafton
The Orlando Sentinel
Published Daily _ NOTICE HEARING
OF OCOEE
$61.74 Please note:the public hearing for the
following ordinance, orvinally adver-
t Used for August 15,has been resched-
uled for September 5,1995 at 7:30 p.m.
Notice is hereby given to Florida State
tate of, 'roriba S.S. Statutes the
Ocoee
COUNTY OF ORANGE hold a public hearing in the Commis-
sion Chambers, City Hall, located at
150 N.Lakeshore Drive,Ocoee,Florida
during a regular session to be held on
September 5.1995,at 7:30 p.m.,or as
Before the undersigned authority personally appeared soon thereafter as possible,in order to
Kelly Demmo , who on oath says i consider the adoption of the following
that he/she is the Legal Advertising Representative of The Orlando Sentinel,a daily °prnanORDINANCE NO.9521
newspaper published at ORLANDO in AN ORDINANCE OF THE CITY OF
OCOEE RELATING TO THE CITY
OR ONGE County, Florida; OF OCOEE MUNICIPAL GENERAL
EMPLOYEES' RETIREMENT
that the attached copy of advertisement, beingy aTIFF—GE—P-1131-14—
E QF pj __ Tr TRUST FUND; AMENDING THE
in the matter of Ordinance Number DEFlNmONS OF'CREDITED SER-
VICE'AND*SALARY'; INCREAS-
ING THE BENEFIT ACCRUAL
in the ORANGrRATE FOR EACH YEAR OF CRED-
COUrt, ITED SERVICE; DELETING THE
was published in said newspaper in the issue;of ngipi95 COMMENCEMENT OF BENEFITS
SECTION;ADDING REVISED PRO-
VISIONS FOR PURCHASE OF
CREDITED SERVICE FOR SEPA-
RATIONS FROM EMPLOYMENT
FOR MILITARY SERVICE ; RE-
Affiant further says that the said Orlando Sentinel is a newspaper published at CONFFLUICTALPROVIaNG FOR SEV,
ORI ANDO in said ,... ERABIUTY OF PROVISIONS AND
PROVIDING AN EFFECTIVE DATE.,
ORAN(E _County, Florida, Interested parties may appear at the
and that the said newspaper has heretofore been continuously published in meeting and be_heard with respect to
said D 6� the proposed action.A copy of the pro-
County, Florida, posed ordinance may be examined at
each Week Day and has been entered as second-class mail matter at the post City Han, 150 N. Lakeshore Drive,
office in ORI ANDO in said 8:00°
Ocoee, and 5:00 pp.mmbetween '., hourse day
0 R4N6E County, Florida, throughNOTICE:FAnyy person who desires to j
for a period of one year next preceding the first publication of the attached appeal.any d ^mawCommis-
sion with respect to any matter consid-
copy of advertisement; and affiant further says that he/she has neither paid erect at such meeting will need a record
nor promised any person, firm or corporation any discount, rebate, of the proceedings and for such pur-
pose may need to ensure that a verbs-
commission or refund for the purpose f s ri his advertisement for tim record of theroceeding is made,
publication in the said newspaper. which record includes the testimony
and evidence upon which the appeal is
based.Persons with disabilities need-
ing assistance to participate in any of
The foregoing instrument was ackno edged fore me this 24 day of
these proceedings
ofthe c City Clerrk.15ould contact.Lake-
shore Drive,Ocoee. FL 32761, (407)
August , 19 , by Kelly Deli'To / 656-2322 Ext.146,48 hours in advance
of the meeting.
who is personally known to me did take : oath _ Jean Grafton,City Clerk
OLS492359 Aug.20,1995
(SEAL) . - -t- , /'..- ,rs ,
-___- :1•'-ro i..sown [I Ostia 1 D.